U.S. sees possible legal challenges to crackdown on steel imports

WASHINGTON, June 19 (Reuters) - The Trump administration
expects U.S. and World Trade Organization-related legal
challenges in response to a possible crackdown on foreign
imports of steel or aluminum, U.S. Secretary of Commerce Wilbur
Ross said on Monday.

President Donald Trump ordered the investigation in April
under the rarely used section 232 of the Trade Expansion Act of
1962. It allows the president to impose restrictions on imports
for reasons of national security.

Ross is expected to announce within days the outcome of the
steel inquiry.

"We assume that if there is any affirmative action that
comes out of either one, there probably will be either a
domestic legal challenge and, or, a WTO challenge, so we have
that very much in mind," Ross told a news conference on the
sidelines of the SelectUSA investment summit.

The administration says the lack of domestic producers could
impede U.S. defense procurement for its armed forces as well as
for strategically important infrastructure. Foreign steel
companies have been concerned the probe may be aimed at shoring
up American producers and cutting out foreign competition

While the investigation has mainly been aimed at cheap
imports from China, European steel exporters worry they will be
targeted by the U.S. measures.

European steel association (Eurofer) chief Axel Eggert told
Reuters last week his group was exploring options, including
submitting a complaint to the World Trade Organization, in
response to U.S. tougher measures.

Speaking during the investment conference, Ross said he
expects the outcome of the investigations to be concluded this
month. Trump would move swiftly to act on the recommendations of
the report, he added.

"The president being the president I don't think he will
dilly dally very long on making his decision whatever it turns
out to be," Ross said. "I would expect this to come to a head
during the month of June."

Steel stocks gained broadly on Monday after four steel
companies were upgraded following a Reuters report on Friday
that the investigation was nearly done.

Nucor, Steel Dynamics, U.S. Steel,
and AK Steel were all upgraded to buy by Longbow
Research.

The S&P 1500 steel sector .SPCOMSTEEL was up 2.5 per cent.
U.S. Steel was up 3.9 per cent, AK Steel was up 4.0 per cent,
Nucor was up 3.1 pct and Steel Dynamics was up 1.6 pct.

Asked during a panel discussion on Monday with UK trade
minister Liam Fox whether European concerns over a potential
U.S. crackdown steel were overblown, Ross said: "There have been
a number of European companies against whom we have had trade
cases and so the problem of overcapacity is not unique to one
segments over the world, it happens to be very concentrated in
China."

"Since we are the world's largest importer of steel, we're
the main victim of the overcapacity, so that is the issue we
have to grapple with," he added.

Fox acknowledged that Britain had concerns over possible
U.S. actions on steel imports because the two countries traded
steel for military projects. The two countries had a "shared
view" on national security as NATO allies, he added.

"We will wait to see what the report says. It's in our
interest that global overcapacity is dealt with ... but we have
unique US-UK security concerns which we have raised," he added.
(Reporting by Lesley Wroughton; Editing by Sandra Maler)

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